Satoshi Nakamoto developed BTC to function as a decentralized substitute for the existing centralized financial system. However, the CEO of FTX, Sam Bankman-Fried, stated that he does not believe Bitcoin will ever become a viable payments network.
Sam Bankman-Fried States Bitcoin Is Inefficient And Can’t Be Used On Large Scale
In an interview with Financial Times, the chief executive officer of FTX noted that his reasoning is based on the “inefficiency and significant environmental costs” of the Bitcoin network. He went on to say that the Proof-of-Work blockchain that Bitcoin uses to verify transactions is incapable of scaling to the point where it can handle the financial dealings of millions of users all over the globe.
He said that the BTC network is neither a payments network nor a scalable network. As a result of this, he thinks that Bitcoin is not a reliable method of payment. Sam Bankman-Fried isn’t the only one in the cryptocurrency field who has this mindset.
There is widespread consensus among crypto market supporters that BTC is best used as an investment vehicle instead of an exchange or payment method. However, several nations are placing significant faith in Bitcoin as a kind of currency. The central African Republic and El Salvador are the two nations that have already declared Bitcoin a legitimate form of currency.
Is There Really A Rise In BTC Adoption?
Even though both nations have made Bitcoin a legitimate form of payment, the use of cryptocurrency is still relatively low. Recent studies conducted by academics in the United States demonstrate that BTC has had very little usage as a form of payment in El Salvador.
According to the head of FTX, to construct a fully functional payment network, another blockchain that operates on Proof-of-Stake is necessary. It is already common knowledge that ETH has been working on a transition to PoS. Sam Bankman-Fried said:
“Systems that you’re conducting millions of transactions with every second mus5 be incredibly efficient, lightweight, and have a reduced cost for their use of energy. Networks based on proof of stake are but not proof of work. We mustn’t increase the size of this endeavor to the point that we will ultimately incur energy expenses for mining that are one hundred times more than what they are right now.”
Bitcoin’s PoW network has been among the primary points of contention among cryptocurrency enthusiasts. On the other hand, the BTC mining sector is making every effort to transition to energy options that are sustainable and environmentally friendly.
However, the head of FTX is of the opinion that BTC is here to stay. He said, “I don’t believe that means BTC has to go,” adding that the cryptocurrency can still be regarded as a commodity, an asset, and value.